SEZs face deadline heat

TNNJan 21, 2007, 12.59am IST

NEW DELHI: The government plans to withdraw approval granted to Special Economic Zones (SEZs) if they are not notified within six months of receiving formal approval. The move is aimed at encouraging SEZ developers to go ahead quickly with state-level approvals and start work rather than sit on formal approvals from the Centre.

Subjecting validity of clearances to notification within six months would discourage non-serious players, commerce secretary G K Pillai said on Saturday.

The move comes amidst growing protest over acquisition of agricultural land for SEZs and mounting political pressure for better rehabilitation. The government is all set to introduce a time-frame in the SEZ rules in a bid to encourage speedy project implementation. More than 60 such proposals, most of them in the IT and IT-related sectors, could be in trouble if the SEZs are not notified soon.

According to figures furnished by the commerce ministry, as of December 13 2006, SEZs proposed by several big corporates including Wipro, Ranbaxy, Hewlett Packard and HP, had not been notified despite the fact that they were approved in March 2006. Mr Pillai said developers of approved SEZs need not be apprehensive as the new land acquisition laws were unlikely to have any effect on their future prospects. Similar is the case with proposed SEZs which are already in possession of land.

Addressing an open house organised by the export promotion council for EoUs and SEZs here, Mr Pillai said that the changes likely to be proposed by the empowered group of ministers (eGOM) on Monday would be introduced in the policy by fine-tuning the rules. The SEZ Act will not be changed as the process of changing an Act is complicated and requires approval from Parliament, he said.

The secretary clarified that there was no moratorium on SEZs. The process of clearance of SEZ proposals, where land was in possession, was likely to continue after the eGoM meeting. There are about 300 proposals seeking clearance of which about 80 proposals are in possession of land. These include the Reliance project in Jhajjar and the Tata project in Gopalpur.

Two proposed meetings of the board of approval (BoA) scheduled this month were postponed following interventions from the PMO and Congress President Sonia Gandhi who wanted the eGoM to take a relook into land acquisition issues.

It was decided that SEZ proposals would be considered only after the eGoM meets so that the decisions taken in the meeting could guide future clearances. Till date, 237 proposals have received formal clearance and and 162 have in-principal clearance. A total of 63 proposals of the 237 formally cleared ones have been notified.